Laos Increases Electricity Costs Despite Producing More Electricity

People complain about having to pay more each year as more dams become operational.
2021-03-11
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Laos Increases Electricity Costs Despite Producing More Electricity In this March 2020 file photo, employees of the Électricité du Laos (EDL) work on a power line in Vientiane, Laos.
Citizen Journalist

State-run power companies in Laos are raising electricity prices, putting a squeeze on businesses suffering from the coronavirus pandemic shutdown and angering customers who say they deserve cheaper power after a decades-long hydroelectric dam building boom, sources in the country told RFA.

The government of Laos has widely touted to the public its controversial economic strategy to become the “Battery of Southeast Asia” by building dozens of hydropower dams on the Mekong River and its tributaries and selling the generated electricity to neighboring countries.

But the people believe that the price of electricity within Laos should decrease as the country produces more power each year.

“We don’t understand why it is so expensive. It’s like, the more dams we build, the more we produce electricity, and somehow we still end up paying more,” a Vientiane homeowner told RFA’s Lao Service.

A resident of central Khammouane province also questioned the rising prices, telling RFA, “The government is raising electricity prices that are already high. Laos is the battery of ASEAN, so her people are supposed to pay less for power.”

“Power prices are rising. They’re now too high especially for low-income families like mine,” a resident of the northern province of Luang Prabang, told RFA’s Lao Service this week.

“Food prices had already been rising and now the electricity prices are creeping up. They’re going up an average of two percent,” the source said.

The owner of a medical clinic in Luang Prabang told RFA that costs per kilowatt hour for the business were up about 14 percent.

“The rate is way higher. Last year 120,000 kip [about U.S. $13] would cover a whole month even when we used air conditioning,” the clinic owner said.

The owner of an ice production facility in the capital Vientiane told RFA that the higher costs were eating into profits.

“We are only making 40 million kip [$4,264] per month. We use a lot of electricity and we can’t afford the new prices. The government should keep prices low,” the icemaker said.

A government employee in capital Vientiane told RFA that it was strange for power prices to increase when salaries remained flat.

An official of the state-run energy company Électricité du Laos (EDL) confirmed the increases to RFA.

“Prices normally rise every year, except last year because of COVID-19,” the official said.

The Ministry of Energy and Mines had a reduced rate policy in place from Apr. 2020 to Feb. 2021 due to the pandemic. From March 2021 rates for residential and commercial electricity use increased compared to 2020 depending on how much electricity is used per account per month.

Between 0-25 kilowatt hours there is no increase, but between 26 to 150 kilowatt hours, the increase is about 19 percent. Between 151 and 300 kilowatt hours, the increase is 14 percent, and for accounts using more than 300 kilowatt hours, the increase was 43 percent.

Commercial rates also increased, but only by about two percent, though businesses classified as entertainment venues must pay a rate about 32 percent higher than general businesses.

Laos has built dozens of hydropower dams on the Mekong and its tributaries under its plan to sell around 20,000 megawatts of electricity to neighboring countries by 2030.

Though the Lao government sees power generation as a way to boost the country’s economy, the projects are controversial because of their environmental impact, displacement of villagers without adequate compensation, and questionable financial and power demand arrangements.

Reported by RFA’s Lao Service. Translated by Max Avary. Written in English by Eugene Whong.

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